For example, while commercial individual health plans are viewed as a struggling market, few commercial payers have been able to successfully to profit from these plans by improving medical loss ratio (MLR), expanding plan offerings, and other operational adjustments.

Centene reported a three percent increase in revenue from individual health plans citing increased enrollment and an MLR improvement. In 2017, Centene reported an 87.7 percent MLR, but managed to see an 84.4 percent MLR in the opening months of 2018.

The commercial group health plan market is a consistently strong market option that can generate favorable revenue outcomes if payers work on managing premium spending and consistent enrollment.

Humana experienced a five percent increase in commercial group revenues that equated to $93 million based on a higher volume of stop-loss revenues and increases in group insurance premiums.

Medicare Advantage is a promising market opportunity for payers that are experiencing a consumer shift as beneficiaries get older and qualify for Medicare.

UnitedHealth Group saw Medicare Advantage enrollment and revenues increase when beneficiaries started to age into Medicare. Individual and group insurance enrollment rates fell, but Medicare Advantage enrollment increased by 10.7 percent as members moved from commercial health plans into MA.

Once payers identify an ideal health plan market to participate in, they need to incorporate strategies in order to manage premium spending and improve MLR, increase health plan value, and attract new consumers to health plan product offerings.

Maintaining and improving MLR is vital to ensure that new health plan products are able to generate strong revenues for payers.

Under the ACA, individual and small group health plans are required to have a minimum MLR of 80 percent. Large group plans are required to have an MLR of 85 percent.

A health plan’s MLR is calculated by adding the costs of claims and health improvement activities together and then dividing the total by earned premium revenue (after taxes and regulatory adjustments). Health improvement activities include wellness programming, preventive care programs, using healthcare data to improve outcomes, and patient safety programming.

In addition, automated claims processing technology could also help ensure payers are not wasting funds or over-reimbursing providers. Automated claims platforms can alert payers when they should intervene during reimbursement processes by detecting inefficiencies or clinical documentation errors within claims submissions.

Payers can improve MLR by adding in preventive care and programs that limit the growth of expensive beneficiary claims. Preventive and wellness programs also qualify as health improvement spending under federal MLR guidelines.

Chronic diseases are responsible for the majority of the nation’s healthcare spending, according to the CDC. Roughly 86 percent of the nation’s healthcare spending total comes from conditions created by chronic and mental health diseases.

HealthTrust of New Hampshire, a state payer that covers benefits for public employees, used financial incentives to encourage preventive care and created a $3.2 million savings opportunity. The payer experienced lower spending as members improved healthy behaviors and used cost-effective healthcare resources.

Payers may also design new reimbursement models to focus on healthy behavior education and chronic disease prevention. CMS provides an example of how a preventive care model for diabetes can encourage providers to address prevention and create lower rates of diabetes health risks.

Payers also should explore Medicare and Medicare Advantage opportunities as older beneficiaries age out of traditional plans and enroll in Medicare-sponsored options.

Medicare enrollment data indicates that 59 million beneficiaries enrolled in any Medicare health plan during 2018. Thirty-seven million beneficiaries enrolled in traditional Medicare while the remaining 22 million enrolled in Medicare Advantage or a specialty Medicare plan.

Capturing the attention of new consumers may require payers to overhaul member engagement strategies and optimize health plan marketing.

Investments in customer service technology can help payers address common consumer frustrations with health plan purchasing by making it easy for members to choose available plan options.

Additional consumer engagement tactics, such as data-driven marketing, can help payers attract and target customers to health plans based on customer characteristics. Using data-driven techniques can help payers write copy and design sales collateral to attract new members.